China Continues To Dominate Global FINTECH Industry

[Shotgunner51]

Jack Ma: In 30 years people will work 'four hours a day and maybe four days a week'

• Jack Ma tells CNBC the dominance of giant companies is on the decline, as more small businesses get exposure with the internet.
• Ma says more "made in America" goods could be the perfect products to sell to China's swelling middle class.
• He warns that artificial intelligence could set off World War III, but humans will win.

Anita Balakrishnan | @MsABalakrishnan 1 Hour Ago

Alibaba founder Jack Ma spent 800 hours traveling around the world last year and plans to increase that to 1,000 in 2017, evangelizing his burgeoning e-commerce platform, globalization and artificial intelligence.

The billionaire Chinese businessman sat down with CNBC this week at the Gateway '17 conference in Detroit for a wide-ranging interview on those topics and others. Here are the highlights:

Shrinking giants

The world's biggest public companies — like Apple, Alphabet and Amazon — have become so dominant that some critics have said they border on monopolies. But Ma said the power of the giant company is on the decline as more small businesses get exposure with the internet.

"Large scale was the model," Ma said. "Personalized, custom-made is the future."​

In a meeting with then President-elect Donald Trump in January, Ma said Alibaba plans to support 1 million American jobs over the next five years, mostly by facilitating sales from small businesses.

"The way to figure out the job creation, one of the best ways, is to help small business to sell their local products across the board," Ma said. "And we have to prepare now. Because the next 30 years is going to be painful."​

Trade and globalization

The clash of economic and political systems has caused tension between the U.S. and China.

"We can no longer have massive trade deficits and job losses," Trump tweeted ahead of his meeting with Chinese President Xi Jinping this year. "American companies must be prepared to look at other alternatives."​

But Ma told CNBC he believes that more "made-in-America" goods — a priority during Trump's campaign— could be perfect for China's swelling middle class. Ma pointed to a sale over the weekend when Alibaba sold 2 million American-made tubes of lipstick within 15 minutes.

Artifical intelligence

Ma said the emerging opportunities — and risks — from artificial intelligence and globalization are two of the topics that keep him on the road.

"This is why I'm traveling, talking to all the government and state leaders and telling them move fast. If they do not move fast, there's going to be trouble," Ma said. "So when we see something is coming, we have to prepare now. My belief is that you have to repair the roof while it is still functioning."​

There could be benefits from artificial intelligence, Ma said, as people are freed to work less and travel more.

"I think in the next 30 years, people only work four hours a day and maybe four days a week," Ma said. "My grandfather worked 16 hours a day in the farmland and [thought he was] very busy. We work eight hours, five days a week and think we are very busy."​

He added that if people today are able to visit 30 places, in three decades it will be 300 places. Still, Ma said the rich and poor — the workers and the bosses — will be increasingly defined by data and automation unless governments show more willingness to make "hard choices."

"The first technology revolution caused World War I," he said "The second technology revolution caused World War II. This is the third technology revolution." With machine learning and artificial intelligence eliminating jobs, "the third technology revolution may cause the Third World War," he said.​

Ma, a teacher by training, also said world leaders should pay attention to the education system to avoid the pain that could come with automation.

"I don't think we should make machines like humans," Ma said. "We should make sure the machine can do things that human beings cannot do."​

Ma said machines will never get the wisdom and experience that comes with being human.

"Humans will win," he said.​

— Reporting by CNBC's David Faber

http://www.cnbc.com/2017/06/21/alib...e-will-work-four-hours-a-day-in-30-years.html

 

[JSCh]

Baidu to integrate AI technologies into financial services
(People's Daily Online) 15:36, June 22, 2017

China’s internet leviathan Baidu has announced its plan to upgrade the company’s financial services by using artificial intelligence (AI), arguing that the technology can help to avoid investment blunders.

According to Zhu Guang, Baidu’s senior vice president, the company will cooperate with the Agricultural Bank of China to launch a financial brain project, as well as to develop applications related to evaluations of clients’ credit and supervision of their financial risks.

“Based on Baidu’s big data and algorithms, we can [deduce] our clients’ ages and educational backgrounds with an accuracy rate of 90 and 85 percent respectively. By generating a financial portrait of our clients, we can attract more customers, which is crucial for our future plans,” Zhu was quoted as saying by Thepaper.cn on June 20. Zhu also noted that AI technologies can be used for identity recognition and data collection, which are vital elements for the development of the financial industry.

“Compared to humans, AI is more accurate in determining the authenticity of cachet and bills. At the same time, by analyzing and studying clients’ behavior and irregular trade events, AI can establish anti-phishing modes to avoid risk,” said Zhu.

Introducing AI technologies into the financial sector is not Baidu’s initiative alone. According to the Wall Street Journal, Bridgewater Associates, the world’s largest hedge fund, is building an artificial intelligence engine to automate management of the company. Rebellion Research, a New York-based investment adviser, also uses AI technologies to make investment decisions.

Following in the steps of its foreign counterparts, Baidu, China’s largest search engine, will build two AI-based financial platforms, helping clients to manage their personal wealth and consumption.

 

[cirr]

BOC, Tencent establish joint laboratory of financial technology

2017-06-23 09:42

Xinhua Editor: Gu Liping

Bank of China (BOC), one of the country's big four state-owned lenders, and Tencent have established a joint financial technology laboratory, said the lender in a statement on Thursday.

The lab will work on cloud computing, big data, blockchain and artificial intelligence to promote financial innovation such as finance in the cloud.

"After months of work, the two sides have made breakthroughs in the fields of cloud computing, big data and artificial intelligence applications, and set up a unified platform of financial big data," said the statement.

The two companies will set up a cloud platform of financial technology, improve risk control and raise efficiency.

China's service sector is expected to play a bigger role in powering the economy as increasingly affluent Chinese consumers demand more diverse and better-quality services.

http://www.ecns.cn/2017/06-23/262626.shtml

 

[cirr]

Internet majors, banks edge closer to fintech success

2017-06-24 09:18

China Daily Editor: Wang Fan

China's internet giants that forayed into online finance are now joining hands with banks, their perceived competitors, to succeed together in the booming financial technology or fintech sector.

The latest such partnership is between Tencent Holdings Ltd and Huaxia Bank Co Ltd, which was announced on Thursday.

The duo plan to co-develop an anti-fraud lab, a financial services cloud, and an artificial intelligence-backed customer service platform, based on their existing collaboration in data security, credit card services and online payments.

Tencent already works with over 200 banks and financial institutions by sharing its big data and cloud computing capabilities, Tencent said in a text message to China Daily.

Tencent's peers, Baidu Inc and Alibaba Group Holding Ltd, which together comprise China's "Tech Trinity", are jostling for supremacy in the internet finance segment. The two already have partnerships or collaborations with the nation's top lenders.

For instance, Alibaba inked a deal in March with China Construction Bank Corp that allows sales of the latter's wealth management products through Alipay, the mobile payment tool of Alibaba.

CCBC also has a similar arrangement with Alibaba's Ant Fortune platforms.

Earlier this week, Baidu pledged to build an intelligent bank with Agricultural Bank of China Ltd that would employ technologies such as big data, artificial intelligence and cloud computing.

JD.com Inc, another e-commerce major, has also joined the fintech partnerships fray. It is working with ICBC, China's largest bank by assets, on fintech, retail banking, loans for small and medium-sized enterprises, and consumer finance.

Li Chao, a senior analyst at consultancy iResearch, said: "All these fintech deals suggest the players concerned are playing to their respective strengths or trying to dominate a particular niche."

"For instance, Alibaba and JD tend to leverage retail-related scenarios, so they've exhibited a peculiar interest in retail banking and consumer finance. Meanwhile, Baidu and Tencent are doubling down on artificial intelligence and cloud computing, something that they've heavily invested in," Li said.

http://www.ecns.cn/business/2017/06-24/262737.shtml

 

[onebyone]

Many argue that cryptocurrencies, such as bitcoin, may become the money of the future, and China seems to be taking it up a notch by working on turning eCurrencies into a legal tender, according to media reports.

Signs from monetary authorities in the country are stoking speculation that China could become the world's first to introduce a national cryptocurrency.

MIT Technology Review, the magazine published by the Massachusetts Institute of Technology, reported on Friday that China’s central bank, the People’s Bank of China, has begun testing a prototype digital currency and making mock transactions with the country’s commercial banks.

If it ends up in circulation, the digital currency may be introduced alongside China’s primary currency, the yuan, and could own the same legal status as a banknote.

VCG Photo

There has been no clear timetable indicating when the digital currency will enter circulation as officials from the People's Bank of China are yet to comment openly on the development of such money or publicize any future plans of its use.

Nonetheless, the pioneering move is significant and the underlying benefits are multifaceted.

The digital currency could cut the cost of financial transactions, reaching millions of Chinese who are unable to access conventional bank services given limited infrastructure.

Adopting a digital currency might also facilitate cross-border transactions, as well as the use of the yuan outside China.

VCG Photo

Even more significantly, according to the report, eCurrency would give the Chinese government greater oversight of the country’s booming digital transactions, and making monetary exchange more traceable could also help reduce corruption – a priority of crucial importance for Beijing in the past few years.

In the long run, a digital fiat currency could also offer real-time economic insights, which would be enormously valuable to domestic policymakers.

Cryptocurrencies have risen to prominence in recent years following bitcoin’s success as a virtual, cryptographically secured currency that circulates without any central authority.

China is one of the largest marketplaces for bitcoin trading. /VCG Photo

The popularity of bitcoin is increasingly affecting its value, which has shot up to 3,000 US dollars in early June from 750 US dollars at the start of the year.
https://news.cgtn.com/news/3d51544e3151444e/share_p.html

 

[Shotgunner51]

Shenzhen, Singapore, Hong Kong to Form Fintech Hubs Federation in Innovation Push
June 24, 2017 @ 10:23 pm By JD Alois

On June 14, the Shenzhen Internet Finance Association, Hong Kong’s Internet Professional Association (iProA) and Singapore’s FinLab announced the establishment of the Shenzhen-Singapore-Hong Kong Fintech Hubs Federation.

The organizations have signed a memorandum of understanding to implement several common working objectives. Besides, the agreement also covers establishing a collaboration platform and information exchange for enterprises in the three cities, strengthening the exchange of information between academic institutions and sharing experiences with fintech development.

Each of the three parties have agreed to hold regular meetings to promote the fulfillment of these objectives.

Witman Hung, president of Hong Kong iProA, said as the Fintech sector developed globally, it’s essential to create a growing international community. The FinTech Hubs Federation will bring together the three cities to provide a neutral, cross-border platform to encourage greater collaboration, engagement and knowledge sharing in this growing global community.

Singapore’s FinLab managing director Felix Tan added that the ideas and businesses emerging from the collaboration would become the new engines of economic growth and job creation for all of Asia in the years to come

https://www.crowdfundinsider.com/2017/06/103512-china-weiyangx-fintech-review-37/
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Hong Kong and Shenzhen form fintech pact
06 June 2017
Source: HKMA

Mr Norman Chan, Chief Executive of the Hong Kong Monetary Authority (HKMA), visited the Office of Financial Development Service, the People’s Government of Shenzhen Municipality (OFDS) to keep abreast of the applications and latest developments of fintech in Shenzhen, and exchanged views on the co-operation among banks and financial institutions in the two cities.

Mr Chan also visited two pioneering fintech firms in Shenzhen, namely Webank and Ping An Technology.

Mr Chan said, “Hong Kong and Shenzhen have their respective edges in the development and applications of fintech. As an international financial centre, Hong Kong has a significant presence of financial institutions from all over the world, as well as a robust and efficient financial infrastructure, which provide a sound base for fintech developments. As for Shenzhen, outstanding technology companies and talents both at home and abroad have been drawn to the city. Through strengthening bilateral co-operation, Hong Kong and Shenzhen can complement each other and bring about mutual benefits.”

Mr He Xiaojun, Director-General of the OFDS said, “The arrangement to deepen bilateral exchanges and co-operation has great significance for the implementation of the Guangdong-Hong Kong-Macao Bay Area development strategy, and the development of Shenzhen into a modern international city of innovation as well as a global technology and industry innovation centre. As one of the three major financial centres on the Mainland, Shenzhen has an innovative and vibrant financial sector and a well-developed high-tech industry. It is a hub not only for many start-ups and research talents, but also many leading global technology companies. At the same time, Hong Kong is an international financial centre with many global financial institutions and talents. Co-operation between the two cities will create mutual benefits and strong synergies, adding new impetus to the Bay Area. It will also signify an important step for the Bay Area to develop into an international fintech centre.”

During this exchange, the HKMA and the OFDS agreed to strengthen co-operation between Hong Kong and Shenzhen, with a view to creating a more favourable environment for the development and use of fintech by banks and other financial institutions. Co-operative initiatives include the following:

The OFDS accepts the HKMA's invitation to take part in the Fintech Summit scheduled in Hong Kong in the second half of 2017, to promote the exchange and co-operation between fintech stakeholders in Hong Kong and the Mainland; The OFDS accepts the HKMA invitation to take part in organising a major fintech competition to provide a platform for fintech firms around the world to compete on innovative concepts and products, so as to encourage innovation and raise industry standards. Details of the competition will be announced later this year; The HKMA will join hands with its strategic partners in Hong Kong, including the Hong Kong Science Park and Invest Hong Kong, with a view to providing assistance to fintech firms in Shenzhen in expanding their business in Hong Kong. Similarly, the OFDS will also provide appropriate support to Hong Kong's fintech firms in their establishment of a presence and developments in Shenzhen; The HKMA and the OFDS will line up major fintech firms in Shenzhen in offering internship positions for students in tertiary education institutions in Hong Kong. At present, Shenzhen’s Webank and Ping An Technology have already indicated their interests in supporting this initiative.

https://www.finextra.com/pressarticle/69544/hong-kong-and-shenzhen-form-fintech-pact

 

[Shotgunner51]

Monaco’s Luxury Hotels, Casinos and Spas Can Now Use Alipay

• Mason Hinsdale
• June 28, 2017

Monaco's famed Monte Carlo Casino will be accepting Alipay at its restaurants, bars, and shops. (Shutterstock)

In a ceremony attended by airline, casino, and luxury hotel CEOs of Monaco, Ant Financial, which operates Alipay, signed a memorandum of understanding (MoU) with the government of Monaco to enable more merchants in the European principality to use Alipay’s mobile payment system.

The Prime Minister of the Principality of Monaco, Serge Telle, said at the signing of the agreement, “The future is becoming cashless, and China is increasingly leading the market in mobile payment innovations. It is exciting that these frictionless payment methods are available to our Chinese visitors for the first time and we look forward to seeing this partnership come to fruition.”​

The move marks effort to give Chinese tourists more payment options

The move is an effort to expand the payment options of Chinese tourists in Monaco while enjoying the microstate’s numerous luxury hotels, resorts, spas, and restaurants. Many merchants had already accepted payments through Alipay prior to the signing of the MoU.

These merchants include many hotels and resorts, like Hotel Hermitage Monte-Carlo and Hôtel de Paris Monte-Carlo. Three spas also previously accepted Alipay payments and numerous bars, shops, and restaurants. More niche luxury services also previously accepted Alipay, like the principality’s premier VIP helicopter airline, Monacair. The Monaco Yacht Club also plans to accept Alipay in the coming months.

Douglas Feagin, the President of International Business for Ant Financial said the move was part of their globalization strategy. “We are focused on working with local partners,” he said at the ceremony, “to bring a seamless Alipay mobile payment experience to Chinese tourists, no matter where they go.”

No doubt the overwhelming number of Chinese tourists traveling to the tiny Mediterranean city-state are high-net worth individuals coming to enjoy the luxury lifestyle of a country known to have the highest per-capita number of millionaires in Europe. Perhaps the city’s most famous attractions are its high-roller casinos, like the Monte Carlo Casino. The Société des bains de mer de Monaco, which owns the Monte Carlo, was in attendance of the MoU signing ceremony.

The Monte Carlo shops, restaurants, and bars have already been accepting Alipay payments.

https://jingdaily.com/alipay-monaco-hotels-casinos-spas/

 

[cirr]

China's Alipay enters Spain

2017-06-29 10:07

Xinhua Editor: Gu Liping

Chinese tourists will be able to use Alipay mobile wallet in Spain thanks to an agreement signed between Spanish bank BBVA and China's Ant Financial Services Group, BBVA reported on Wednesday.

Alipay is one of world's largest online and mobile payment platforms operated by Ant Financial Services, an affiliate company of Alibaba. BBVA, Spain's second-largest bank, is the first Spanish financial institution to cooperate with Alipay, integrating the system into the bank's Smartpay service.

The bank explained that Smartpay is already available for all stores and functions thanks to an app installed in the store's cell phone. The app should be updated in order to accept payments with Alipay.

The Spanish lender is also working with Spain's large stores so that they can accept payments with Alipay as early as possible, and merchants interested in signing up for Smartpay can register at BBVA branches, the bank said.

"This agreement is a great opportunity to service this growing market of visitors to Spain while allowing Spanish stores to promote sales and special offers directly to Chinese tourists," said Jose Fernandez da Ponte, Head of Business Development and New Ventures at BBVA.

Rita Liu, Head of Alipay EMEA (Europe, Middle East and Africa), said "cooperating with BBVA not only allows us to make Chinese tourists' shopping experience in Spain as simple as in China, but also makes it easier for Spanish merchants to do business with Chinese customers".

http://www.ecns.cn/business/2017/06-29/263394.shtml

 

[JSCh]

Jul 06, 2017 05:07 PM
Five Things You Need to Know About China’s First Online-Payment Clearinghouse
By Dong Junfeng

There is no doubt that China has become the world’s largest online-payments market, whether measured by user numbers, transaction value or annual growth rate. Data from the central bank showed that from 2013 through 2016, the number of transactions handled by nonbank payment service providers increased from 37 billion yuan ($5.4 billion) a year to 185.5 billion yuan. The total value of these transactions surged from 18 trillion yuan to 120 trillion yuan.

The success of online payments is backed by the rapid development of internet and mobile technologies in China, as well as the booming domestic consumer market and the rise of a new generation of young consumers who were quick to adopt the new payment method. However, the increasing prevalence of online-payment options has also posed challenges for users in terms of privacy protection, information security and risk controls in the financial system.

The construction of an independent clearinghouse dedicated to third-party online payments is a key step to address these concerns and tighten oversight on internet finance. As the world’s first online-payment clearinghouse, the Online Settlement Platform for Non-Bank Payment Institutions — as the clearinghouse is formally called — is also an innovative move because it is the first time that market players have been granted the leading role in building such an important national financial infrastructure. The central bank and the Payment & Clearing Association of China jointly hold a 37% stake in the new platform, while 38 other online service providers own the remaining 63% of the business.

Here are some key facts about the China’s first online-payment clearinghouse.

Why do we need a clearinghouse for third-party payments?

Third-party payment providers offer the convenience for users to complete a payment for goods or services by simply clicking a button on their mobile phones or computer screens, but behind the click is a series of transactions, clearance and settlement activities making money transfers possible between customers’ and merchants’ accounts.

Before the establishment of the online-payment clearinghouse, all the necessary procedures of payment transactions, from making payment requests to clearing, were handled by third-party payment providers despite the fact they don’t have payment clearing licenses. The blurred boundaries between payment and clearing services also allowed payment companies to pool customers’ money in their accounts before the money was transferred to receivers, raising concerns that they could be used for unintended purposes. Most payment firms negotiated with banks separately on terms and fees to facilitate transactions and build direct links with banks, falling outside of the central bank’s oversight. These practices raised concerns that the online-payments market is becoming a potential hotbed for money-laundering and other cybercrimes, and posing risks to users’ privacy.

With the introduction of the new clearinghouse, a clear boundary will be drawn between online payments and clearing services, forcing payments firms to improve the compliance of their businesses and offer better protection to consumers. It is a key step toward ensuring the healthy development of the payment markets and the security of the financial markets.

How did the online-payment clearinghouse go live?

The new clearinghouse needed the capacity to handle hundreds of millions of transaction requests from over 200 payment companies and possible sudden surges of transactions during holiday seasons and special sales events like Alibaba’s Singles Day annual shopping event on Nov. 11. A distribution computing network offers the right solution to the platform.

Work to build the clearinghouse began in September after a meeting was held between the central bank and representatives from 22 of the leading payment firms. The central bank proposed the principle of “Build together, own together and share together” to encourage more market players to join forces.

In the following months, over 200 professionals from more than 30 companies and institutions, including some top data architects, software engineers and internet security experts, worked together to draft a technical road map and construction plan for the new clearinghouse.

The final plan won approval from a special team of experts from the central bank in December. Work on building the platform began immediately, with technology, personnel and equipment being contributed from a variety of institutions. The first trial run of the platform was completed on March 31. Four commercial banks and the three biggest payment providers — Ant Financial-affiliated Alipay, Tencent’s Tenpay and JD.com’s Chinabank Payments — were among the first institutions to connect with the platform. The new platform handled its first online-payment clearance for Tenpay, involving a transaction between the Bank of China and China Merchants Bank.

Why should third-party payment firms connect with the new clearinghouse?

China has issued over 250 third-party payment licenses, but the market has become increasingly consolidated as the top nine firms control over 96% of the market share.

Unlike traditional bank card payments — which are handled by the state-backed bank card association, China UnionPay, under a unified clearing system applied equally to all banks — online payments have to follow different standards, and it has been increasingly difficult for small players to win the support of banks and break into the market.

By connecting with the online-payment clearinghouse, payment firms — no matter big or small — will be granted equal access to transaction clearing services and will be subject to the same standards of business operations and risk control measures.

With the unified clearing platform, capital flows between payers and receivers will be more transparent because it will cut the multiple direct links between third-party payment firms and banks. Instead, payment firms will connect with the new platform and clear their transactions through the platform, which in turn connect with banks. It will save the operating costs of both payment firms and banks and help make transactions more standardized and trackable.

What is the technology architecture of the clearinghouse?

The clearinghouse adopted a multicentered structure to ensure security. With six data processing and storage centers based in three different locations, each center has a built-in processing capacity of 20,000 to 30,000 transactions per second. This multicentered structure allows for greater data backup and ensures consistent operations, even if one facility encounters problems. The system employs the most up-to-date security standards and encryption technology to protect data from cyberattacks, hacking and leaks.

The distributed architecture of the platform also makes it easy to expand its capacity in the future by adding extra data centers to the system.

How does the clearinghouse work?

Payment companies connecting with the clearing platform initiate payment requests with the system. The requests are then distributed among the different data centers to process before being passed to related receiver banks accessing the system.

Payments are processed at each center and submitted to the central system. The gathered data is submitted to the central bank’s clearing system to complete money transfers among banks.

The clearing platform is currently undergoing final preparations before its final launch.


Five Things You Need to Know About China’s First Online-Payment Clearinghouse - Caixin Global

 

[TaiShang]

Fintech sector to rocket, report says
By CAI XIAO | China Daily | Updated: 2017-08-10

A visitor tries out a machine for fitting glasses at the 2017 China International Internet of Things Technology Expo in Beijing. LIU XIANGUO / FOR CHINA DAILY

Chinese financial technology companies could expand the lendable population from around 200 million creditcard-carrying prime borrowers to around 800 million, according to the latest report of global consulting firm Oliver Wyman.

The report said big-data analysis, the internet of things, and blockchain are the three technologies with the greatest potential, owing to their ground-breaking capabilities to acquire, assemble, analyze, and apply information. Data treatment and information processing are at the heart of decision-making for financial services, especially in China.

Blockchain uses a cryptographic network to provide a single source of truth, enabling untrusting parties with common interests to co-create a permanent, unchangeable and transparent record of exchange and processing without relying on a central authority.

The report said the application of these technologies will create significant disruptions along value chains and bring about distinctive opportunities for major areas of the financial services sector.

In financing, with the availability of non-financial data sources and improved knowledge of how to use it, fintech players will be able to use behavioral data-based models to better judge which customers intend to repay their loans, and so identify fraud risk.

"For digital lenders, such advances open up a blue ocean with a long tail of around 600 million Chinese borrowers who were traditionally considered below-prime and too risky to lend to," said Cliff Sheng, Oliver Wyman partner and author of the report.

In investing, with stronger computing capabilities, online wealth management platforms can conduct detailed analysis by pulling together various types of data about the market, individual securities, and investors, the report said.

"Assuming these solutions with fintech applications attract 2.5 percent of invested assets by Chinese self-directed investors by 2020, these would represent assets under management worth 5 trillion yuan ($743.62 billion)," Sheng said.

In the area of insurance, connected ecosystems, along with the increased adoption of technology devices, provide not only gateways to innovative insurance products but also alternative data sources for tailored products and pricing, it said.

"Such technology upgrades and ecosystem embedding could present insurers with premium revenues amounting to 400 billion yuan by 2020," the report said.

According to the report, China's fintech sector has attracted $6.4 billion in investments in 2016, making it the global leader in fintech venture capital activities representing 47 percent of global fintech investments, up from only 7 percent in 2013.

With this major potential for a new wave of technology-driven growth, there is no one-size-fits-all approach that will suit all market players.

The report summarized key success factors: data abundance and application, a large customer base, availability of proprietary and comprehensive products, and strong knowledge of financial services and risk management.

http://www.chinadaily.com.cn/business/tech/2017-08/10/content_30401963.htm

 

[TaiShang]

China sees highest uptake of fintech

China Daily, August 23, 2017

China ranks top among 20 world markets in terms of fintech adoption, with 69 percent of surveyed consumer respondents saying they are actively using fintech services, 33 percentage points higher than the global average.

Participants try mixed reality technology applications at the 25th China International Financial Exhibition held from July 27 to 30 in Beijing. [Photo/Xinhua]

According to the report by consultancy services provider EY, based on more than 22,000 online interviews in 2017, global fintech adoption has been growing fast since 2015 when EY did its first study on the issue.

Money transfer and payment services are major drivers of the fast growth, said the report.

Around 64 percent of fintech users said they prefer using digital channels to manage "all aspects of their life". And 13 percent of polled consumers said they are regular users of five or even more fintech services, which include money transfer and fintech, wealth planning, deposit and investment, borrowing and insurance.

The report said it is expected that the fast growth of fintech adoption will continue to rise and reach 52 percent globally in the next two years.

"Even though it's easier said than done, the best thing to do is to build a product that resonates clearly with people's needs," said George Lucas, founder and CEO of Acorns Australia, a fintech services provider, when asked about customer traction.

"Once you have that, your early adopters will recommend you to friends … and you can get viral growth through word of mouth", said Lucas.

Although fintech adoption in the insurance sector is relatively lower than that in payment and money transfers, its growth is obvious－from 8 percent in 2015 to 24 percent in 2017, and is expected to grow to more than 50 percent in the next few years.

Analysts said technologies will help to handle risk exposure amid rising fintech adoption around the world, and regulation will also take advantage of technologies in the sector.

Jack Chan, managing partner of EY Financial Services' China operation, called for greater activity from regulators and policymakers for some market support fintech services. "For example, as a new service or product using financial technologies is to be launched, regulators and policymakers can run it in a 'regulatory' box, which tests the product or service within a limited scale and observe what risks could emerge and what loopholes must be taken care of," said Chan.

In China, regulators have strengthened regulation of peer-to-peer lending, online payment, and virtual currency trading in the past two years.

According to Chan, the moves support the fintech sector as they help the market keep outstanding players with a strong focus on effectiveness, transparency, compliance and efficiency, and rule out unqualified players.

Fintech adoption rates in other markets with active users are 52 percent in India, 42 percent in the United Kingdom, 40 percent in Brazil, 37 percent in Australia and Spain, 36 percent in Mexico, and 35 percent in Germany and South Africa. The fintech adoption rate in the United States is 33 percent, which is the same level as the global average.

 

[JSCh]

Spotlight: How is AI disrupting financial industry
Source: Xinhua| 2017-09-18 00:36:39|Editor: Lu Hui

People look at a bionic robot at an exhibition during the 2017 national mass innovation and entrepreneurship week in Beijing, capital of China, Sept. 15, 2017. More than 300 items and projects on artificial intelligence, biotechnology, new material, energy conservation, environmental protection, intelligent robot and Internet plus were displayed at the exhibition. (Xinhua/Zhang Chenlin)

by Xinhua writers Wang Naishui, Li Ming

NEW YORK, Sept. 17 (Xinhua) -- Artificial intelligence (AI), along with other financial technology (fintech) innovations, are significantly changing the ways that financial business are being run, especially in the fields like trading, insurance and risk management, leading the traditional financial industry into a new era.

ROBOTS REPLACING HUMANS

Back in 2000, Goldman Sach's New York headquarters employed 600 traders, buying and selling stock on the orders of the investment bank's clients. Today there are just two equity traders left, as automated trading programs have taken over the rest of the work.

Meanwhile, BlackRock, the world's biggest money manager, also cut more than 40 jobs earlier this year, replacing some of its human portfolio managers with artificially intelligent, computerized stock-trading algorithms.

Those two big companies are not the only financial institutions replacing human jobs with robots.

By 2025, AI technologies will reduce employees in the capital markets by 230,000 people worldwide, according to a report by the financial services consultancy Opimas.

"Asset managers, analysts, traders, compliance administrators, back-office data collection and analysts are most likely to lose their jobs, because their jobs are easier to be replaced by automation and AI," Henry Huang, an associate professor at Yeshiva University's Sy Syms School of Business, told Xinhua.

"The net effect of this kind of automation will be more about increasing the productivity of the workforce than of robots simply replacing people," said Richard Lumb, group chief executive of Accenture's Financial Services operating group.

The best automated firms will outperform their competitors by making existing workforces more productive through AI, he added.

While humans are losing jobs in the financial industry, companies are enjoying the benefits bringing by AI technologies.

"Initially AI will add the most value and have the largest impacts in compliance (especially anti-money laundering and know-your-customer functions), cybersecurity and robo-advice," Lumb told Xinhua.

WALL STREET EMBRACES FINTECH

Facing rising pressures from fintech innovations, represented by AI, Wall Street financial institutions choose to embrace the new trend.

"In general, we see the outlook for fintech as strong. Demand for fintech by banks is growing because of regulatory and capital pressures, competition from large technology players like Google and Amazon and the abundance of new security threats," Lumb said.

The FinTech Innovation Lab, an annual program launched in 2010 by Accenture and the Partnership Fund for New York City to foster fintech growth, has helped New York participants raise more than 440 million U.S. dollars.

"The FinTech lab has proven to be a significant program for engagement between entrepreneurial technology companies and New York's financial industry," said James D. Robinson III, General Partner and Co-founder of RRE Ventures.

In New York City alone, fintech investment overall has increased from 216 million dollars in 2010 to 2.4 billion dollars in 2016.

"Big new frontiers are only just beginning to opening up in fintech - from AI, block chain and robotics to biometrics, augmented reality and cybersecurity," Lumb said.

Among all the fintech innovations, the prospect of the block chain has the highest expectation.

"The block chain will change the way people store information, which is real, spreading fast and cross-border, and its 'de-centric' feature will allow everyone to know what other people are doing. The application of block chain in finance will once again bring about a revolutionary impact on the industry, just like AI does," said Huang.

FINTECH IN CHINA

Although it is hard to tell which country is leading the fintech innovations, many experts agree that China has outperformed other countries in fintech services adoption.

"The work in China has been dramatically ahead of anywhere else in the world," said Jim Bruene, founder of Finovate conferences, which showcase cutting-edge banking and financial technology.

With more intelligent, in-context financial services, especially commerce activities built around social media applications, "China is likely five or six years ahead of the United States," Bruene told Xinhua.

The latest report by Ernst & Young showed that China's fintech adoption rate came at 69 percent in an index that measures users' activity in various areas, including money transfer, payments, investments, borrowing and insurance, the highest among 20 major markets globally.

Wechat Pay, the e-payment platform built inside the 900-million-user Chinese social media application Wechat, is seen as the future of fintech services by many experts.

"Messaging is the next web browser, fintech and all other applications are going to live in a mobile messaging application like Wechat, just like how they lived in web browsers," said Greg Ratner, co-founder and chief technology officer of Troops, a U.S. artificial intelligence startup.

"It is going to be the future and is already happening in China. And I think it will come to the United States in the next five years," Ratner told Xinhua.

According to Huang's observation, there is a major difference between China and the United States in fintech development model.

"In the U.S., banks are the main driver of fintech innovations, while in China, BAT (Baidu, Alibaba, Tencent) representing the enterprises contribute most to the fintech development," Huang said.

"Considering the scale of banks in China, they should play a more important role in fintech innovations," he suggested.

 

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The mainland’s private and public sectors are building on rapid advances in technology and readily available consumer data to develop unique applications for consumers and businesses


PUBLISHED : Saturday, 28 October, 2017, 7:33am
UPDATED : Saturday, 28 October, 2017, 7:32am


While US technology giants such as Google, Facebook and Apple race to dominate the growing commercial market for artificial intelligence (AI), China Inc is digging deep to create a broad-based platform for this technology to drive the country’s economic development.

That was the consensus drawn from keynotes and panel discussions on Thursday at Finnovasia, the part of Hong Kong Fintech Week focusing on the future of AI in finance.

Significant headway has been made on the mainland in AI, based on advances in computer-processing power, algorithms and data collection used by academic researchers and major internet companies such as Baidu, Alibaba Group Holding, Tencent Holdings and JD.com.

In July, the State Council laid out goals to build a domestic AI industry worth nearly US$150 billion in the next few years, and to make the mainland an “innovation centre” in this field by 2030.

“The US has better scientists doing research in AI … [But regarding] the union of AI and financial technology, China is leading and will continue to dominate in the future,” Chan Ka-keung, adjunct professor of finance at the Hong Kong University of Science and Technology, said during a panel discussion on the mainland’s rise in AI.

Chan said China’s success was helped by consumers enthusiastically embracing new technology and how they had no issues about sharing relevant data with trusted service providers, such as those in online search, e-commerce and social media.

During the same Finnovasia panel, Ling Kong, chief technical officer at online lending company Dianrong, pointed out that the company serves millions of customers every month, each bringing plenty of data sets that are used for making decisions.

Chan also said the rapid growth of new fintech services, such as peer-to-peer lending marketplaces and online money market funds, was made possible by a lack of innovation by the country’s traditional banks in addressing the needs of not only the average consumer, but also many small and medium-sized enterprises.







High-flying start-up Ant Financial Services Group, which runs online payments service Alipay and money market fund Yu’ebao, has made AI a key driver for expanding its businesses and improving customer service.

Donald Feagin, the senior vice-president of global business at Ant Financial, said in a keynote on Thursday that the company’s customer service was “powered by AI technologies like natural language processing, machine learning and voice recognition”.

“The possibilities are really endless – of what we can do here,” said Feagin, a former senior partner at Goldman Sachs. He said AI – in particular, deep-learning technology – had helped to detect fraud and anticipate issues at Alipay, which has about 520 million users.

Deep learning, a subset of a broader family of so-called machine-learning technologies, is concerned with algorithms that teach computers to learn by example and perform tasks based on classifying various data, including images, sound and text.

“So our fraud loss today is less than one in 1 million,” said Feagin. “This is a fraction of the fraud losses of other global payments players.

“Our system scans thousands of variables in any given transaction, looking at user behaviour patterns, then analysing the broader environment around the transaction to see if there are any red flags that would cause concern,” he said.

Ant Financial is so confident of the system that it decided to put its power in the hands of Alipay customers.

“We said we will protect you for up to 1 million yuan loss for less than 2 yuan a year [in charges],” said Feagin. “We worked with a local insurance company to provide that policy … because this is really added value [providing] peace of mind.

“I know my account is not going to be compromised for 2 yuan a year.”

He said the system and other AI-fuelled capabilities are being tested by Ant Financial on the mainland to refine them in preparation for a roll-out in other markets around the world, including Hong Kong.

Ant Financial, which was valued by a CLSA analyst last year at US$74.5 billion, is an affiliate of New York-listed Alibaba, the owner of the South China Morning Post.







Eberhard Schoeneburg, the lead AI adviser at global consulting firm PwC, said the future of AI will be driven by start-ups, including early-stage companies that have never been heard of.

“Right now, the AI market is dominated by all these big companies – the Googles, Facebooks and Apples of the world,” he said. “However, in my eyes, the small companies will not rely on all these deep learning and other [existing] tools because they will invent their own tools.”

A recent report by the McKinsey Global Institute said AI-led automation can give the mainland economy “a productivity injection that [will add] 0.8 to 1.4 percentage points to GDP growth annually, depending on the speed of adoption”.

China was the world’s second-biggest investor in AI enterprises last year, injecting US$2.6 billion into the sector, according to the state-run think tank, Wuzhen Institute. The United States topped the list with US$17.9 billion in investments.

“When it comes to the applications, the systems and market for AI, there is a lot going on in China,” said HKUST’s Chan.

http://www.scmp.com/tech/innovation...when-it-comes-artificial-intelligence-powered

 

[Adam WANG SHANGHAI MEGA]

not learner anymore in some areas but leaders China DJI represents 70% market share globally does this ring a bell?

 

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China is looking at many large scale blockchain applications

Here is a sample of seven blockchain applications in China.

* A 400 million yuan ($60.4 million) asset-backed security(ABS), which was backed by Baidu’s blockchain technology, was issued on the Shanghai Securities Exchange on Sept 19

* Qschou.com, a crowdfunding site serving critically ill patients, is using blockchain technology for donors to track their charity donations

* Alihealth, the medical arm of Alibaba, and the government of Changzhou city in East China’s Jiangsu province, have rolled out a pilot program to integrate medical data sparsely located in different hospitals, with the help of blockchain technology,

* a shared ledger of a blockchain Tencent has built, anxious parents only need to register information on their missing child once and the information will be shared instantly via different child-finding platforms that are connected by this blockchain,

* Tencent has launched a blockchain solution product called TrustSQL, which the tech giant hopes will improve efficiency and reduce risks in various sectors, including the finance and sharing economy.

* China Merchants Bank announced that it had successfully incorporated blockchain technology into its business regarding global cash management, cross-border direct settlement and unified account management

* A copyright trade and protection portal using blockchain technology went online in Shanghai, the first of its kind in China. This is by a local IT startup company called Yuanben.

China Fintech IPOs

Several fintech companies in China are indeed preparing for IPO in the US or HK

* Jianpu Technology Inc, a wholly-owned subsidiary of Chinese fintech firm Rong360, has filed for a $200 million IPO in the US. Goldman Sachs, Morgan Stanley and JP Morgan are bookrunners for the deal, according to a stock exchange filing.

Jianpu has reached more than 56 million registered users and in the first half of 2017, over 2,000 financial service providers nationwide offered more than 100,000 financial products on the platform, including consumer and other loans, credit cards and wealth management products.

The platform enable users to obtain personalized search results and recommendations that are tailored to their particular financial needs and credit profile. It also provides financial service companies with tailored data, risk management and end-to-end solutions.

* Chinese micro lender Qudian, which raised $900 million through its IPO on NYSE, exceeding the $750 million target.
https://www.nextbigfuture.com/2017/11/singapore-hk-and-china-are-hot-for-fintech-and-blockchain.html